Taiwan exemplifies resourcefulness

By Thomas Friedman

Every so often someone asks me: “What is your favorite country other than your own?”

I have always had the same answer: Taiwan.

“Taiwan? Why Taiwan?” everyone asks.

Very simple: Because Taiwan is an island in a typhoon-laden sea with no natural resources to live off of — it even has to import sand and gravel from China for construction — yet it has the fourth-largest financial reserves in the world. Because rather than digging in the ground and mining whatever comes up, Taiwan has mined its 23 million people, their talent, energy and intelligence — men and women.

I always tell my friends in Taiwan: “You are the luckiest people in the world. How did you get so lucky? You have no oil, no iron ore, no forests, no diamonds, no gold, just a few small deposits of coal and natural gas — and because of that you developed the habits and culture of honing your people’s skills, which turns out to be the most valuable and only truly renewable resource in the world today. How did you get so lucky?”

That, at least, was my gut instinct. However, now we have proof.

A team from the Organisation for Economic Cooperation and Development (OECD) has just come out with a fascinating little study mapping the correlation between performance on the Program for International Student Assessment (PISA) exam — which every two years tests math, science and reading comprehension skills of 15-year-olds in 65 countries — and the total earnings on natural resources as a percentage of GDP for each participating country. In short, how well do your high school kids do on math compared with how much oil you pump or how many diamonds you dig?

The results indicated that there was a “a significant negative relationship between the money countries extract from national resources and the knowledge and skills of their high school population,” said Andreas Schleicher, who oversees the PISA exams for the OECD. “This is a global pattern that holds across 65 countries that took part in the latest PISA assessment.”

Oil and the PISA do not mix. (See the data map at www.oecd.org/dataoecd/43/9/49881940.pdf)

As the Bible says, Schleicher added: “Moses arduously led the Jews for 40 years through the desert — just to bring them to the only country in the Middle East that had no oil. But Moses may have gotten it right, after all. Today, Israel has one of the most innovative economies and its population enjoys a standard of living most of the oil-rich countries in the region are not able to offer.”

So hold the oil and pass the books.

According to Schleicher, in the latest PISA results, students in Singapore, Finland, South Korea, Hong Kong and Japan stand out as having high PISA scores and few natural resources, while Qatar and Kazakhstan stand out as having the highest oil rents and the lowest PISA scores. (Saudi Arabia, Kuwait, Oman, Algeria, Bahrain, Iran and Syria stood out the same way in a similar 2007 Trends in International Mathematics and Science Study test, while, interestingly, students from Lebanon, Jordan and Turkey — also Middle East states with few natural resources — scored better.)

Also lagging in recent PISA scores were students in many of the resource-rich countries of Latin America, such as Brazil, Mexico and Argentina. Africa was not tested.

Canada, Australia and Norway — countries that also have high levels of natural resources — still score well on PISA, in large part, Schleicher said, because all three countries have established deliberate policies of saving and investing these resource rents and not just consuming them.